Gujarat-Based Steelmaker Plans Rs 450 Cr IPO, DRHP Filed With SEBI; Eyes BSE, NSE Listing

The Securities and Exchange Board of India (SEBI), which oversees capital markets, has received Gujarat-based German Green Steel and Power Limited's draft red herring prospectus (DRHP), which aims to raise funds through an initial public offering (IPO). An offering of up to 10,000 equity shares by Inamulhaq Shamsulhaq Iraki and 10,000 equity shares by Abdulhaq Shamsulhaq Iraki are part of the initial public offering (IPO), which has a face value of Rs 10 per share and a fresh issue of up to Rs 450 crore.

The proceeds of its fresh issuance, up to Rs 325.21 crore, will be used to finance the company's capital expenditure needs for the expansion of its manufacturing facility in Samakhiyali, Kutch, Gujarat, as well as a hybrid wind and solar power plant; Rs 55.01 crore will be used for the full or partial repayment of some outstanding loans that the company has taken out; and general corporate purposes.

The company may think about a pre-IPO placement after consulting with the top managers who are in charge of book-running. If a pre-IPO placement is made, it cannot be more than 20% of the amount of the fresh offering. The issue is being made through the book-building method, in which eligible institutional purchasers will get no more than 50% of the offer, while non-institutional bidders will receive at least 15% and retail individual bids will receive 35%.

The revenue from operations of German Green Steel and Power increased from Rs 892.25 crore in fiscal 2022 to Rs 1,129.78 crore in fiscal 2024 at a compound annual growth rate (CAGR) of 12.53%. The EBITDA margin jumped from 4.39% in financial year 2022 to 7.09% in fiscal year 2024, indicating outstanding operating performance. EBITDA expanded at a CAGR of 43.04% from Rs 39.15 crore in fiscal 2022 to Rs 80.11 crore in fiscal 2024. From Rs 34.16 crore in fiscal year 2022 to Rs 41.67 crore in fiscal year 2024, profit after tax surged at a CAGR of 10.43%. Revenue from operations, EBITDA, and profit after tax for the nine-month period that ended on December 31, 2024, were Rs 979.79 crore, Rs 68.18 crore, and Rs 32.07 crore, respectively.

Bigshare Services Private Limited is the offer's registrar, while Syestematix Corporate Services Limited and Emkay Global Financial Services Limited are the only book-running lead managers. It is proposed that the equity shares of the company will be listed on the NSE and BSE.

According to a CARE evaluation cited in the DRHP, German Green Steel and Power Limited is a vertically integrated iron and steel producer that mostly operates in western India. It has a significant presence in Gujarat and focuses largely on TMX Bars. Sponge iron, MS Billets, and TMT bars make up the majority of its product line. It can manufacture TMT bars with a diameter of 8 mm to 40 mm and it has also made "German TMT" a well-known brand for TMT bars in Gujarat.

Through its material subsidiary, German TMX Private Limited, it operates two production facilities in the state of Gujarat: one in Samakhiyali and the other in Viramgam. As of December 31, 2024, its captive power plant and renewable energy plant provide around 67.72% of its energy needs.